Blur Launches Free P2P Blend Lending Protocol for NFTs

Blur recently announced the launch of a new peer-to-peer lending protocol called Blend, which supports NFT-backed lending. The platform charges borrowers and lenders no fees, offering market-determined rates on borrowing positions indefinitely until liquidation.

In collaboration with Transmission11 and Dan Robinson, Blur’s Blend implementation avoids the oracle dependency in the core protocol. Interest rates and loan-to-value ratios are determined based on the terms lenders are willing to offer, and liquidation is triggered if the Dutch auction fails.

Blend differs from other NFT-backed lending protocols because of several design choices that prioritize convenience for borrowers, gas efficiency, and long-term collateral support. For example, the platform supports unlimited perpetual lending, allowing borrowers to avoid the inconvenience of manually rotating positions before maturity.

The platform also employs a peer-to-peer model suitable for individual lending, rather than pooling lenders’ funds, thereby avoiding centralized on-chain administrators or governance. Instead, Blend assumes the existence of more sophisticated lenders capable of participating in complex on-chain and off-chain agreements, assessing risk, and using their own funds.

Additionally, Blend allows NFTs to be liquidated whenever a lender triggers a refinancing auction and no one is willing to take on the debt at any rate, thereby minimizing the risk of bankruptcy. Utilizing a sophisticated off-chain supply protocol, the platform is suitable for users looking to borrow against their NFT collateral as well as any lender willing to offer competitive rates.

When deployed, some protocol parameters, such as protocol fees, are controlled by the BLUR administration. However, the platform charges no fees to borrowers and lenders, making it an attractive option for NFT holders looking to borrow against their assets.

Overall, Blend has made significant contributions to the development of the field of NFT-backed lending protocols. Its innovative design choices prioritize borrower convenience and fuel efficiency while avoiding centralized management and on-chain governance. By allowing loans indefinitely, the platform offers greater flexibility and convenience to borrowers. The peer-to-peer model and liquidation mechanism also enhance Blend’s resilience to insolvent positions, making it a powerful platform for NFT lending.

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according to Kyptos

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